About 9.6% of the prime jumbo mortgages in securitizations were at least 60 days past due in January, up from 9.2% in December, the 32nd straight increase in "serious delinquencies," according to Fitch Inc.
"The trend line for delinquencies indicates the 10% level could be reached as early as next month," Vincent Barberio, a Fitch managing director, said in a press release issued Monday. The rate almost tripled in 2009, Fitch said.
Soured loans backing nonagency securities ballooned last year amid new defaults caused by slumps in home prices and employment and as the federal government pushed servicers to consider loan modifications and states moved to slow foreclosures, reducing property liquidations after borrowers stopped paying.
The share of borrowers current in the previous month and that then turned delinquent fell to 1.2% in the month covered by January bond reports, down from 1.3% in the December reports, Fitch said. The jumbo sector of the nonagency market was the only one in which roll rates — the amount of loans turning delinquent — rose from a year earlier, according to the statement.
Jumbo home loans are larger than Fannie Mae or Freddie Mac can finance. Their loan limits now range from $417,000 in most places to as much as $729,750 in high-cost areas.
Loans in jumbo securities can be smaller than those amounts if they were issued in earlier years.
After falling as low as 63 cents on the dollar in March, prices for the most-senior securities backed by fixed-rate prime jumbo loans were at 83 cents last week, according to Barclays Capital. Prices have fallen 3 cents on the dollar in the past month amid declines across credit markets.